Pandemic-Era Expansion Fed Greater Nevada's Commercial Delinquencies

Greater Nevada's delinquency rate for commercial loans went from zero on Dec. 31, 2021 to 11.81% by March 31, 2022. It reached a high of 18% in March 2024 and stood at 11.9% at the end of last year. Meanwhile, its net charge-off rate for commercial loans has been around 3% for the 12 months ending Sept. 30, 2025.

Greater Nevada lost $4.2 million (ROA -0.99%) in the three months ending Dec. 31, improving from a loss of $36.6 million (-8.28%) in 2024's fourth quarter, but worsening from a loss of $106,982 (-0.03%) in the third quarter. For the year, it lost $690,484 (-0.16%), a vast improvement from its net loss of $39.2 million (-8.90%) in 2024.

Michael Thomas, Greater Nevada's chief strategy officer, offered some insights to CU Times.

CU Times: I'm trying to understand how you got there, and how you're getting out. What kind of loans went bad?

Thomas: Greater Nevada Credit Union expanded into USDA-backed commercial lending to serve rural and underserved businesses in Nevada. That model was later extended nationally through our commercial lending CUSO. The pandemic created significant demand for government-backed lending programs. Some of those businesses have shown signs of performance challenges, which is not uncommon in specialized commercial portfolios.

We have strengthened our management of each borrower relationship. Delinquencies are declining, every loan has a defined resolution plan, and our experienced team is focused on bringing our borrowers current and reducing overall risk. We are making steady, measurable progress.

CU Times: What assumptions turned out to be wrong?

Thomas: Like many lenders, portions of the portfolio originated in a low-rate environment and included floating-rate structures. The rapid rise in interest rates increased payment pressure for some borrowers and contributed to higher delinquencies. We adjusted quickly, strengthened relationship management, ongoing monitoring, and are actively working with borrowers to stabilize performance. Conditions have improved, and delinquency trends are moving in the right direction."

CU Times: How were the loans secured? How has underwriting changed?

Thomas: All commercial loans are secured by collateral and third-party valuations. Many also include government guarantees, which provide an additional layer of loss protection.

We have taken the lessons learned and built an experienced leadership team, both at Greater Nevada and within our commercial lending CUSO. Together, we have strengthened underwriting, increased ongoing monitoring, and improved how we manage borrower and partner relationships. These learnings have also positioned us to support other credit unions that are engaged in commercial lending or considering it. Our experience, both the successes and the challenges, can make a meaningful difference for others. We can help credit unions originate more disciplined loans and structure shared-risk programs in ways that better protect their members while still ensuring local businesses have access to the capital they need."

Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.